The global push to tighten tax enforcement is gaining speed, and while the move is aimed at catching corporate tax evasion worth billions, early signals show that everyday consumers, especially in import-heavy markets, may end up footing part of the bill. From the price of packaged food to the cost of online goods, sharper digital surveillance by tax agencies worldwide could nudge companies to pass compliance costs down the supply chain.A global tax sweep with local consequences
In the past two years, tax authorities in the US, EU, and parts of Asia have begun using advanced algorithms, cross-border data sharing, and AI-based audit tools to track profits shifted across jurisdictions. India, too, has stepped up enforcement through technology-driven scrutiny.
The effort is meant to close loopholes exploited by multinational companies. However, increased compliance, transaction reporting, and tariff adjustments could alter what businesses pay, and what consumers eventually shell out.
“People think global tax enforcement is a boardroom issue. It’s not,” said Professor Pramod Kumar Siva, who specialises in international trade and tax policy. “When governments tighten tax rules simultaneously, supply chains feel the pressure. And when supply chain ..
How prices trickle down to your shopping basket
The average Indian grocery retailer relies on goods connected to global trade — edible oils, packaged snacks, fertilisers that affect crop output, processed foods, and imported ingredients used by domestic manufacturers. A rise in operational costs anywhere along this chain can influence end-prices.
According to experts, three areas could see the immediate impact:
1. Higher compliance costs for multinationals
AI audits, automatic information exchange, and cross-border reporting demand expensive digital infrastructure.
“Tax enforcement is becoming a high-tech race,” Prof. Siva noted. “Companies upgrading systems don’t absorb the cost out of goodwill, they add it to product pricing.”
2. Retaliatory tariffs between major economies
If two countries disagree on tax treatment, especially digital tax rules, they can quietly initiate tariff retaliation.
“These are not headline-grabbing trade wars,” Prof. Siva explained. “They are small, targeted tariff nudges that don’t make news but show up in your grocery bill. For example, a tariff change on sunflower oil or cocoa imports can push up MRP on biscuit packets or cooking oil within weeks.”
3. Supply chain rerouting
Stricter tax scrutiny often forces companies to restructure global operations, which can slow imports or add new intermediaries.
“That restructuring cost doesn’t stay with the importer,” said Prof. Siva. “It flows right through to wholesalers, retailers, and finally the consumer.”
Digital enforcement: The silent driver behind price shifts
Unlike traditional audits, new-age enforcement is constant, algorithm-driven and real-time. Customs bodies worldwide now use:
AI-flagging of suspicious invoices
Country-to-country reporting of company revenues
Automated mismatch detection for cross-border payments
Blockchain-based customs tracking in pilot stages
While these tools increase transparency, they also raise compliance obligations for companies handling imports, exports, and digital transactions. And that, analysts warn, could gradually increase consumer prices before people even realise why.
“Digital enforcement is becoming as fundamental as customs duty,” Prof. Siva said. “The difference is, customs duty is visible on paper. AI-driven tax costs are invisible — but no less real.”
Will Indian households feel the pinch?
Not immediately, but gradually — yes.
India is deeply integrated with global supply chains. "Even domestic FMCG goods depend on imported ingredients, packaging materials, and logistics routed through multiple jurisdictions. A global spike in tax compliance costs can translate into slightly higher MRPs, not overnight, but steadily," Prof. Shiva said.
“These global shifts don’t create inflation shocks,” Prof. Siva clarified. “They create inflation drizzle — slow, steady, and difficult to reverse.”
A global tax crackdown aims to make multinationals pay a fair share. But the ripple effect — through tariffs, systems upgrades, and supply chain changes — could quietly add pressure on everyday essentials.
And while governments debate fairness, and companies adjust operations, shoppers may soon be paying a little more for that same packet of noodles or cooking oil, without knowing the true reason behind the rise.
Source Name : Economic Times